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November 4, 2008 DOL Home > SOL | ![]() |
Nowlin Amicus Brief IN THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF WEST VIRGINIA CLARKSBURG
DIVISION
BRIEF OF AMICUS CURIAE, |
May 4, 1981: | District director awards benefits commencing January 1, 1976. |
February 14, 1986: | ALJ awards benefits commencing October 1, 1975. |
June 26, 1990: | BRB vacates and remands |
August 28, 1991: | ALJ reinstates award of benefits |
August 17, 1993: | BRB vacates and remands |
June 14, 1994: | ALJ reinstates award of benefits |
August 31, 1995: | BRB vacates and remands |
June 10, 1996: | ALJ reinstates award of benefits |
August 14, 1997: | BRB vacates and remands |
January 16, 1998: | BRB denies Director's motion for reconsideration and clarification | May 14, 1999: | ALJ reinstates award of benefits, commencing May 1, 1976. |
June 22, 2000: | BRB affirms award and modifies commencement date to January 1, 1976. |
EACC did not petition for
review of the Board's June 22, 2000 decision.
The award therefore became final on August 21, 2000, upon the expiration
of the sixty-day period for filing a petition for review. See 33 U.S.C. §921(c) (incorporated
by 30 U.S.C. §932(a)). In December
2000, EACC assumed its obligation of paying monthly benefits to Mrs. Nowlin,
and reimbursed the Trust Fund (with interest) for the benefits the Trust Fund
had paid on its behalf. See 30
U.S.C. §934(b)(1) (upon final determination of its liability for benefits,
operator must reimburse Trust Fund for benefits paid).
On April 1, 2002, Mrs. Nowlin filed this suit under section 21(d) of the LHWCA. 33 U.S.C. §921(d) (incorporated by 30 U.S.C. §932(a); 20 C.F.R. §725.604) (permitting the beneficiary of a final compensation order, or the district director, to file an action in district court for enforcement of the order). EACC filed a motion to dismiss on various procedural grounds, which this Court denied. Nowlin, 266 F.Supp.2d at 508. Following a scheduling conference, the Court issued an order establishing a timetable for the filing of dispositive motions and accompanying briefs, and inviting the Director to participate as an amicus "[i]n light of the novel question presented." Order dated July 28, 2003. The Director now files this amicus brief.
1) Whether the Secretary's
regulation at 20 C.F.R. §725.607 limits the claimant's entitlement to
twenty-percent additional compensation to instances in which the employer
defaulted on benefits payable under the terms of an effective award.
2) Whether the claimant is
eligible for twenty-percent additional compensation notwithstanding payment of
benefits by the Black Lung Disability Trust Fund on behalf of an employer that
has defaulted on an effective award.
3) Whether section 725.607 is valid because it is "reasonably related" to the Black Lung Benefits Act's purpose of imposing primary liability for black lung benefits on coal mine operators.
Section 14(f) of the Longshore
and Harbor Workers' Compensation Act ("LHWCA") provides:
If any compensation, payable under the terms of an award,
is not paid within ten days after it becomes due, there shall be added to such
unpaid compensation an amount equal to 20 per centum thereof, which shall be
paid at the same time as, but in addition to, such compensation, unless review
of the compensation order making such award is had as provided in section 921
of this title and an order staying payment has been issued by the Board or
court.
33 U.S.C. §914(f).
Section 14(f) is one of many LHWCA procedural provisions incorporated
into the BLBA. 30 U.S.C. §932(a); see
generally Donovan v. McKee, 669 F. Supp. 138, 140 (S.D. W.Va. 1987)
(awarding BLBA claimant twenty-percent additional compensation), aff'd,
845 F.2d 70 (4th Cir. 1988).
The BLBA, however, specifically authorizes the Secretary to vary the
incorporated LHWCA provisions before applying them under the BLBA. 30 U.S.C. §932(a) (LHWCA provisions are
incorporated "except as otherwise provided . . . by regulations of the
Secretary"); Director, OWCP v. Nat'l Mines Corp., 554 F.2d 1267,
1274 (4th Cir. 1977) (the BLBA “empower[s] the Secretary to depart
from specific requirements of the Longshoremen's Act in order to administer the
black lung compensation program”).[9] Pursuant to this authority, the Secretary
promulgated section 725.607 to implement the incorporated section 14(f):
(a) If any
benefits payable under the terms of (1) an award by a deputy commissioner
(§725.419(d)), (2) a decision and order filed and served by an administrative
law judge (§725.478), or (3) a decision filed by the Board or a U.S. court of
appeals, are not paid by an operator or other employer ordered to make
such payments within 10 days after such payments become due, there shall be
added to such unpaid benefits an amount equal to 20 percent thereof, which
shall be paid to the claimant at the same time as, but in addition to, such
benefits, unless review of the order making such award is sought as provided in
section 21 of the LHWCA and an order staying payments has been issued.
(b) If, on account of an operator's or other employer's
failure to pay benefits as provided in paragraph (a) of this section, benefit
payments are made by the fund, the eligible claimant shall nevertheless
be entitled to receive such additional compensation to which he or she may be
eligible under paragraph (a) of this section, with respect to all amounts paid
by the fund on behalf of such operator or other employer.
(c) The fund shall not be liable for payments in
addition to compensation under any circumstances.
20 C.F.R. §725.607 (emphasis added).
In promulgating this
regulation to fit the BLBA, the Secretary altered the language and operation of
section 14(f) in three ways that are relevant to the instant case. First, the Secretary changed section 14(f)'s
phrase "not paid" to "not paid by an operator or other employer
. . . ." 20 C.F.R.
§725.607(a). Second, the regulation
provides that a claimant is entitled to additional compensation even if the
Trust Fund pays benefits on behalf of a defaulting operator. 20 C.F.R. §725.607(b). Third, the regulation provides that the
Trust Fund may never be held liable for twenty-percent additional compensation. 20 C.F.R. §725.607(c). The Secretary explained in the regulation's
preamble that it "is intended to encourage the prompt payment of benefits
by operators whether or not additional proceedings are pursued." 43 Fed. Reg. 36815 (Aug. 18, 1978).
B. Section 725.607 entitles a claimant to
twenty-percent additional compensation on benefits the operator fails to pay
pursuant to an effective award, notwithstanding the Trust Fund's payment of
those benefits. It does not entitle a
claimant to twenty-percent additional compensation on those benefits the Trust
Fund paid in the absence of an effective award.
Mrs. Nowlin contends that
section 725.607 entitles her to twenty-percent additional compensation on all
the benefits that EACC failed to pay her during the merits litigation. EACC contends that section 725.607 entitles
Mrs. Nowlin to nothing because the Trust Fund paid her all the benefits that
EACC failed to pay during the merits litigation. Neither party is correct.
i) Section 725.607 limits a
claimant's entitlement to twenty-percent additional compensation to instances
in which the employer defaulted on benefits payable under the terms of an
effective award.
In order for a claimant to be
entitled to additional compensation, section 725.607 requires that there be
benefits "payable under the terms of (1) an award by a [district director]
(§725.419(d)), (2) a decision and order filed and served by an administrative
law judge (§725.478), or (3) a decision filed by the [Benefits Review] Board or
a U.S. court of appeals . . . ." 20
C.F.R. §725.607(a). The three types of
awards listed in the regulation have one thing in common: they are all
"effective" awards. See 33
U.S.C. §921(a) (discussed infra at pp. 10-12, 16-17). Although district director and ALJ awards
become effective under different circumstances, once there is an effective
award the operator must commence the payment of benefits to the claimant. 20 C.F.R. §725.530(a).[10]
A district director's award –
issued before an operator has had an opportunity for a hearing – becomes
effective only if uncontested. Section
725.419(d) specifies that a district director's award becomes effective only if
the operator fails to request a hearing or revision of the award within thirty
days. 20 C.F.R. §725.419(d).[11] If the operator timely contests the district
director's award, it is not effective, and the operator is not obligated to pay
benefits. Thus, section 725.419(d)
ensures that an operator will not be required to pay benefits before it has had
an opportunity to defend itself.
Similarly, section 725.607(a)'s reference to section 725.419(d) makes
clear that additional compensation is "payable under the terms of a
district director's award" only if that award becomes effective and the
operator fails to pay benefits.[12]
An ALJ's award, by contrast,
is issued after an operator has had the opportunity for a hearing and becomes
effective upon filing regardless of whether it is contested. LHWCA Section 21(a) states that "[a]
compensation order shall become effective when filed in the office of the
[district director]." 33 U.S.C. §921(a)
(incorporated by 30 U.S.C. §932(a)).
The black lung program regulations applicable to ALJ decisions similarly
provide that an ALJ's decision becomes effective when it is filed in the
district director's office. 20 C.F.R.
§725.478 (ALJ decision must be filed in district director's office upon
issuance); 20 C.F.R. §725.479(a) (ALJ's "decision and order shall become
effective when filed in the office of the [district director].").[13]
Applying these principles to
the facts here, there were five distinct periods during which no benefits were
payable pursuant to an effective award.
EACC, therefore, bears no liability for additional compensation on the
benefits the Trust Fund paid during those periods. First, there were no benefits payable pursuant to an effective
award before the first ALJ decision in February 1986. The Trust Fund, however, paid a total of $47,866.20 in benefits
before February 1986 pursuant to the district director's May 4, 1981 award. Because EACC had timely contested that
award, it did not become effective, and did not obligate EACC to pay
benefits. 20 C.F.R. §725.419(d); Reich
v. Youghiogheny & Ohio Coal Co., 858 F. Supp. 1381, 1390 (S.D. Ohio
1994), aff'd, 66 F.3d 111 (6th Cir. 1995). And, because EACC was not obligated to pay
benefits pursuant to an effective award, it has no liability for additional
compensation on the benefits paid from May 1981 through February 1986 – the
date of the first ALJ decision.
The four additional periods
during which there were no benefits payable under the terms of an effective
award were the periods between each of the Board's four decisions vacating the
preceding award and each of the succeeding ALJ awards on remand. See supra, p. 6. Following each Board vacatur, there was
no effective award until the filing of the succeeding ALJ award on remand. During these four periods, the Trust
Fund once again paid benefits – a total of $24,858.40 – pursuant to the
district director's May 4, 1981 award.
Added to the $47,866.20 the Trust Fund paid Mrs. Nowlin before the first
ALJ award, the total amount the Trust Fund paid Mrs. Nowlin pursuant to the
district director's May 4, 1981 award was $72,724.60 ($47,866.20 plus
$24,858.40). Because this amount was
not paid pursuant to an effective award, no twenty-percent additional
compensation attaches to it. It must
therefore be deducted from the total of $127,332.40 that the parties have
stipulated the Trust Fund paid Mrs. Nowlin before calculating the
twenty-percent additional compensation due.
This subtraction leaves $54,607.80.
This is the amount that EACC failed to pay pursuant to an effective
award within the meaning of section 725.607.
Mrs. Nowlin is entitled to twenty percent of that amount, i.e.,
$10,921.56.[14]
Mrs. Nowlin's only argument to the contrary lacks merit. She starts from the correct premise that an ALJ award obligates the operator to reimburse the Trust Fund for any benefits the Fund has previously paid the claimant. Mrs. Nowlin argues that an operator's failure to timely reimburse the Trust Fund entitles the claimant to twenty-percent additional compensation on the amount the operator owes the Fund. Mrs. Nowlin's Brief at 8. As we explain below, however, the regulation Mrs. Nowlin cites in support does not address operator reimbursement of the Trust Fund and makes no mention of operator liability for twenty-percent additional compensation. Moreover, the statutory and regulatory provisions that do address an operator's obligation to reimburse the Fund specify other consequences for an operator's failure to make timely reimbursement and also fail to mention operator liability for twenty-percent additional compensation.
Mrs. Nowlin cites 20 C.F.R. §725.502(b)(2) (2003) in support of her argument. Mrs. Nowlin's Brief at 8. Although this regulation does not apply, supra, footnote 1, the applicable regulation, 20 C.F.R. §725.502(c), embodies an identical principle: an ALJ award requires payment not only of monthly benefits to the claimant, but also of any "past due benefits."[15] Mrs. Nowlin incorrectly assumes that the obligation to pay "past due benefits" refers to the operator's obligation to reimburse the Trust Fund. The phrase "past due benefits," however, refers to benefits that were due but not paid to the claimant. 20 C.F.R. §725.502(c). In this case, no past benefits were due Mrs. Nowlin at the time of the first ALJ award in 1986, or at the time of any of the subsequent ALJ awards on remand, because the Trust Fund had timely paid her all the benefits that were due. Thus, section 725.502(c) is simply not relevant here. It addresses a situation in which there are "past due benefits" owed the claimant. It does not address an operator's obligation to repay the Trust Fund pursuant to an ALJ award, as Mrs. Nowlin contends. Finally, although section 725.502 addresses how benefit payments should be made, e.g., benefits shall be paid periodically, promptly and directly to the individual entitled, it makes no mention of operator liability for twenty-percent additional compensation.
The sections of the BLBA and its implementing regulations that do address operator reimbursement of the Trust Fund further undermine Mrs. Nowlin's argument. 30 U.S.C. §934; 20 C.F.R. §§725.602, 725.603.[16] Under these provisions, an operator that fails to timely reimburse the Trust Fund is subject to a lien on its property in the amount of the debt, and a lawsuit by the Secretary to enforce the lien and/or collect the debt. 30 U.S.C. §934(b)(2), (b)(4); 20 C.F.R. §725.603(b), (c). These provisions apply only after the award has become final, i.e., the time for requesting further proceedings has expired. Id. Significantly, none of them mentions operator liability for twenty-percent additional compensation. Thus, EACC is not liable for twenty-percent additional compensation based on its failure to reimburse the Trust Fund after issuance of the ALJ awards in this case. The Court should therefore reject Mrs. Nowlin's argument that she is entitled to twenty-percent additional compensation on all the benefits the Trust Fund paid her.[17]
ii) The Trust Fund's payment of
benefits on behalf of EACC while an effective award was in place does not
render Mrs. Nowlin ineligible for twenty-percent additional compensation on
those benefits.
EACC contends that section
725.607 does not apply where, as here, the Trust Fund paid the claimant the
benefits owed her after the employer's default. EACC's Brief at 5-12.
EACC seeks support for this proposition not only in the language of
section 725.607, but also in the Secretary's regulations at sections 725.502
and 725.522. All three regulations,
however, support the opposite conclusion: notwithstanding Trust Fund payment, a
claimant is entitled to twenty-percent additional compensation after an
employer's default, provided an effective award was in place at the time of the
Fund payment.
First, EACC argues that there
are no "unpaid benefits" pursuant to section 725.607 because the
Black Lung Disability Trust Fund paid all the benefits due Mrs. Nowlin during
litigation of the claim. EACC's Brief
at 5-12. The language of section
725.607(a) clearly refutes this argument.
It provides that the claimant is entitled to twenty-percent additional
compensation "[i]f any benefits . . . are not paid by an operator or
other employer . . . within 10 days . . . ." 20 C.F.R. §725.607(a) (emphasis added). The benefits paid by the Trust Fund pursuant to the ALJ awards
were "not paid by an operator or other employer," thus
rendering the benefits "not paid" within the meaning of the regulation. Moreover, section 725.607(b) expressly
provides that "[i]f, on account of an operator's . . . failure to pay
benefits [pursuant to an effective award] . . . benefit payments are made by
the fund, the eligible claimant shall nevertheless be entitled to receive"
twenty-percent additional compensation.
20 C.F.R. §725.607(b).
Second, EACC argues that an
operator has no obligation to pay benefits unless and until an award becomes
final. EACC cites revised section
725.502 of the Secretary's regulations in support of its argument that the
regulations fail to define when an award becomes "effective," and
that absent such a definition, only a final award requires operator
payment. EACC's Brief at 11.[18] The statute and applicable regulations
clearly state, however, that an ALJ's award is effective – and therefore
requires payment of benefits – when filed in the district director's
office. 33 U.S.C. §921(a) (incorporated
by 30 U.S.C. §932(a)) (award "effective" when filed in district
director's office); 20 C.F.R. §725.479(a) (same); 20 C.F.R. §725.530(a)
(requiring payment of benefits within thirty days of ALJ award).[19] Thus, the filing of each successive ALJ
award, coupled with EACC's failure to pay Mrs. Nowlin benefits, imposes on EACC
liability for additional compensation.
Finally, EACC argues that the
Trust Fund, not the operator, must pay any benefits due pursuant to an ALJ
award while the award is on appeal.
EACC relies on section 725.522 for this proposition. EACC's Brief at 9-10.[20] Section 725.522, titled "Payments prior
to final adjudication," does not relieve an employer of the obligation to
pay benefits pending appeal. Rather,
section 725.530(a) requires "[a]n operator . . . ordered to pay . . .
benefits by an administrative law judge . . . [to] commence the payment of
benefits . . . within 30 days of such . . . order . . . ." Section 725.522 merely echoes the Trust
Fund's statutory obligation to pay benefits after an operator defaults. The Trust Fund must pay benefits when the
"operator . . . fails or refuses to commence the payment of benefits . . .
." 20 C.F.R. §725.522(b). Similarly, the applicable statutory
provision mandates that the Trust Fund pay benefits (subject to reimbursement
by the operator) when the liable operator "(i) has not commenced payment
of such benefits within 30 days after the date of an initial determination of
eligibility by the Secretary of Labor, or (ii) has not made a payment within 30
days after that payment is due."
26 U.S.C. §9501(d)(1)(A).
Importantly, section 725.522 explicitly states that section 725.607's
twenty-percent additional compensation provision applies to cases in which the
Trust Fund pays benefits on behalf of an operator. 20 C.F.R. §725.522(b) ("[i]n the event that the fund
undertakes the payment of benefits on behalf of an operator or carrier, the
provisions of §§725.601-725.608 shall be applicable to such operator or
carrier.").
Accordingly, none of the three
regulations EACC cites supports its position.
Rather, all three clarify that section 725.607 renders the operator
liable for twenty-percent additional compensation for the benefits the Trust
Fund pays pursuant to an effective award because the liable operator has
defaulted.
C. Section 725.607 is valid because it is
"reasonably related" to the BLBA's purpose of imposing primary
liability for black lung benefits on coal mine operators.
EACC last argues that section
725.607 is invalid if it entitles a claimant to twenty-percent additional
compensation notwithstanding the Trust Fund's payment of benefits on behalf of
a defaulting employer. EACC's Brief at
12-18. EACC claims that providing
additional compensation "to claimants that already have use of the money
as paid by the Trust Fund would constitute pure windfall and be inconsistent
with the purpose of the §914(f) penalty which was to insure [that] injured
workers timely received their benefits."
EACC's Brief at 17.
The validity of a regulation
promulgated under the BLBA will be sustained if it is "'reasonably related
to the purposes of the enabling legislation.'" Harman Mining Co. v. Director, OWCP, 826 F.2d 1388, 1390
(4th Cir. 1987), quoting Mourning v. Family Publications Service,
Inc., 411 U.S. 356, 369 (1973); Nat'l Mines Corp., 554 F.2d at
1275. BLBA regulations "are
presumptively valid," and the party seeking to demonstrate their
invalidity bears a "heavy burden."
Harman Mining, 826 F.2d at 1390.
EACC has not met that burden here.
Section 725.607 is reasonably
related to the purposes of the BLBA.
The Act imposes on coal mine operators primary liability for benefits
due their former employees who are totally disabled due to pneumoconiosis. 30 U.S.C. §932(a), (h). Congress intended to impose liability for
black lung benefits on individual coal mine operators – rather than the Trust
Fund – to the "maximum extent feasible." Old Ben Coal Co. v. Luker, 826 F.2d 688, 693 (7th
Cir. 1987), citing S. Rep. 95-209, 95th Cong., 1st Sess.
9 (1977), reprinted in Committee on Education and Labor, House of
Representatives, 96th Cong., Black Lung Benefits Reform Act and
Black Lung Benefits Revenue Act of 1977 at 612 (Comm. Print) (1979).
The Trust Fund, therefore, is
a payor of last resort. It is available
to make payments when no liable coal mine operator may be identified or the
liable coal mine operator defaults. 26
U.S.C. §9501(d)(1)(A), (B); see generally Director, OWCP v. Trace Fork Coal
Co., 67 F.3d 503, 506 n. 6 (4th Cir. 1995) (Trust Fund must pay
benefits when a coal mine operator cannot be held liable); Nat'l Mines Corp.,
554 F.2d at 1275 (Trust Fund must pay benefits when liable operator
defaults).
Section 725.607 seeks to
encourage operators to comply with effective awards pending appeal, thereby
protecting the Trust Fund from being used as an operator-surrogate while an
award is contested. Operator
non-compliance with effective awards has been a pervasive problem under the
BLBA and has contributed significantly to the Trust Fund's multi-billion dollar
debt. 65 Fed. Reg. 80009-11 (Dec. 20,
2000); 64 Fed. Reg. 54999-55000 (Oct. 8, 1999). DOL explained section 725.607's purpose in detail in the preamble
to the revised black lung program regulations.
65 Fed. Reg. at 80009-11; see also 64 Fed. Reg. at 54999-55001;
62 Fed. Reg. 3365-66 (Jan. 22, 1997).[21] Just as EACC argues here, operators had
commented that the Trust Fund's statutory obligation to pay interim benefits
after an operator declined to do so eliminated the need for the twenty-percent
provision because Trust Fund payment put compensation in the claimant's hands
during an employer's appeal. In
response, DOL explained that the congressional objective of ensuring timely
receipt of benefits by claimants "does not extend to insulating the
responsible operator from the economic risks of paying benefits on an award
which might ultimately be reversed."
64 Fed. Reg. at 55000.
Clearly there is a risk that claimants whose awards are reversed will be unable to repay the resulting overpayment.[22] "[R]ecovering overpayments from a largely elderly and unemployed population [is] problematic at best." 65 Fed. Reg. at 80011. An operator's failure to comply with an ALJ award pending appeal shifts to the Trust Fund the risk of non-recovery of overpayments. That risk, however, properly rests with the liable operator. 65 Fed. Reg. at 80009-11; 64 Fed. Reg. at 54999-55001.[23]
To discourage operators from using the Trust Fund in this manner, DOL promulgated section 725.607 and made explicit an operator's liability for twenty-percent additional compensation when the Trust Fund pays benefits on account of an operator's default. 65 Fed. Reg. at 80009. The regulation imposes on EACC the cost of additional compensation because of its failure to timely pay the claimant the benefits owed pursuant to effective ALJ awards, a failure that necessitated Trust Fund payment and the associated risk of non-recovery of any overpayment. In this manner, the regulation serves Congress' purpose of imposing liability on responsible operators to the "maximum extent feasible." 65 Fed. Reg. at 80010.[24]
Finally, EACC argues that
receipt of twenty-percent additional compensation would be a
"windfall" to the claimant where, as here, the Trust Fund paid her
benefits throughout the entitlement litigation. EACC's Brief at 17.
Imposition of liability for twenty-percent additional compensation,
however, seeks to deter coal mine operators from failing to comply with
effective awards in future cases. It
attempts to protect the Trust Fund from operator default such as happened
here. This public purpose overrides the
fact that a claimant may receive additional compensation.
In sum, section 725.607 serves
the BLBA's purpose of imposing on coal mine operators primary liability for
benefits due their former employees who are totally disabled due to pneumoconiosis. The operator held liable for benefits
pursuant to an effective award must pay the claimant in a timely manner or pay
twenty-percent additional compensation.
The regulation is reasonably related to the statute's purpose and is
therefore valid.
For all of the foregoing reasons, the Director, OWCP, respectfully urges the Court to deny EACC's motion for summary judgment, and to grant Mrs. Nowlin's motion for summary judgment to the extent it seeks twenty-percent additional compensation on those benefits the Trust Fund paid pursuant to an effective award.
Respectfully submitted,
THOMAS E. JOHNSTON
United States Attorney
Northern District of West Virginia
____________________________
BETSY STEINFELD JIVIDEN
Assistant United States Attorney
1100 Main Street, Suite 200
P.O. Box 591
Wheeling, WV 26003
(304) 234-7764
Of Counsel: HOWARD M. RADZELY
Acting Solicitor of Labor
DONALD S. SHIRE
Associate Solicitor
_____________________
EDWARD WALDMAN
Counsel for Enforcement
U.S. Department of Labor
Office of the Solicitor
Suite N-2117
200 Constitution Ave., N.W.
Washington, D.C. 20210
(202) 693-5671
Attorneys for the Director, Office
of Workers’ Compensation Programs,
United States Department of Labor
I hereby certify that on November ___, 2003, a copy of the foregoing Brief of Amicus Curiae was mailed, postage prepaid, to the following:
Robert F. Cohen, Jr., Esq.
Cohen, Abate & Cohen, L.C.
P.O. Box 486
Morgantown, WV 26507-0846
William S. Mattingly, Esq.
Jackson Kelly PLLC
P.O. Box 619
Morgantown, WV 26507
__________________________
BETSY STEINFELD JIVIDEN
Assistant U.S. Attorney
Footnotes:
[1] Although revisions to the black lung program regulations took effect on January 19, 2001, and the revised regulations generally apply to claims pending on that date (see 20 C.F.R. §725.2(c) (2003)), the decision awarding benefits in this case became final before January 19, 2001 – the Board's last decision is dated June 22, 2000. Thus, contrary to the parties' assumption that the revised regulations apply, the pre-January 19, 2001 program regulations govern this case. Throughout this brief, citations to the black lung regulations refer to the pre-January 19, 2001 regulations, unless otherwise indicated. (20 C.F.R. Part 725 (2000).)
[2] Twenty percent of $127,332.40 is actually $25,466.48.
[3] OWCP Annual Report to Congress for Fiscal Year 2001 at 61. The Fund currently must borrow from the general treasury to pay most of the interest on this debt, although the Fund's tax receipts suffice to pay benefits and the administrative costs of the program. Id. at 26.
[4] Where, as here, the miner filed his claim before January 1, 1982, his widow is entitled to survivor's benefits based on the miner's claim if the miner is determined either to have been totally disabled due to pneumoconiosis at the time of his death or to have died due to pneumoconiosis. The widow must prove only her relationship to the miner and her dependency on him. 30 U.S.C. §932(l); 20 C.F.R. §725.212(a)(3)(ii); see, e.g., Keener v. EACC, 954 F.2d 209, 211 n. 1 (4th Cir. 1992). In addition, Mrs. Nowlin is entitled to receive any benefits awarded on her husband's claim that were not paid before he died. 20 C.F.R. §725.545(c)(1); see, e.g., Charles v. Director, OWCP, 1 F.3d 251, 253 (4th Cir. 1993).
[5] For claims like Mr. Nowlin's, filed before January 1, 1982, the
Trust Fund is required by statute to pay retroactive benefits, i.e., benefits
that accrue before the date of the district director's initial determination,
notwithstanding an employer's contest of the claimant's entitlement. 26 U.S.C. §9501(d)(1)(A).
[6] Under the BLBA, once an
OWCP district director (formerly known as a "deputy commissioner," see
20 C.F.R. §725.101(a)(11)) renders an initial determination, any party may
request a de novo hearing before an ALJ. 33 U.S.C. §921(c) (incorporated into the BLBA by 30 U.S.C.
§932(a)); 20 C.F.R. §§725.419(a), 725.450.
A party aggrieved by an ALJ's decision may appeal to the Benefits Review
Board, whose members are appointed by the Secretary of Labor. 33 U.S.C. §921(b) (incorporated by 30 U.S.C.
§932(a)); 20 C.F.R. §725.481. Any party
aggrieved by the Board's decision may file a petition for review with the
United States Court of Appeals for the circuit in which the injury
occurred. 33 U.S.C. §921(c)
(incorporated by 30 U.S.C. §932(a)).
[7] An employer may seek a "stay of payments" from the Board or a Court pending appeal. 33 U.S.C. §921(b)(3), (c) (incorporated by 30 U.S.C. §932(a)). The Board or Court may grant a stay if the employer demonstrates that "irreparable injury would otherwise ensue." Id. The granting of a "stay of payments" excuses an employer from liability for twenty-percent additional compensation. 33 U.S.C. §914(f) (incorporated by 30 U.S.C. §932(a)); 20 C.F.R. §725.607(a).
[8] EACC did pay Mrs. Nowlin
benefits during its appeal of the second ALJ award, from October 1991 through
August 1993. The parties agree that
Mrs. Nowlin is not entitled to twenty-percent additional compensation for the
benefits paid during this period.
[9] The BLBA also generally authorizes the Secretary to promulgate regulations "appropriate to carry out the provisions of" the Act. 30 U.S.C. §936.
[10] 20 C.F.R. §725.530(a), titled "Operator payments;
generally," provides that:
An operator . . . which has
been determined liable for the payment of benefits to a claimant by the
[district director], or ordered to pay such benefits by an administrative law
judge, the Board, or a court . . . shall commence the payment of benefits . . .
within 30 days of such determination [or] order . . . .
Thus, section 725.607(a) requires the payment
of additional compensation if an operator fails to commence the payment of
benefits within forty days of an effective award (i.e., section
725.607(a)'s ten days, plus section 725.530(a)'s thirty days).
[11] 20 C.F.R. §725.419(d)
provides that:
If no response to a proposed
decision and order is sent to the [district director] within [30 days] . . . ,
the proposed decision and order shall become a final decision and order, which
is effective upon the expiration of the applicable 30-day period.
[12] If an operator does request
further proceedings, the Trust Fund is nevertheless required to pay benefits
pursuant to 20 C.F.R. §725.420(c). This
regulation implements 26 U.S.C. §9501(d)(1)(A)(i), which requires the Trust
Fund to pay benefits where the operator fails to commence payment within thirty
days of an initial determination of entitlement. 20 C.F.R. §725.420(c) provides:
If a notified operator
refuses to commence payment of a claim within 30 days from the date on which an
initial determination is made under this section, benefits shall be paid by the
fund to the claimant . . . .
[13] Case law under the BLBA and
LHWCA applying these provisions includes: Amax Coal Co. v. Director, OWCP,
892 F.2d 578, 582 (7th Cir. 1989); Nowlin, 266 F.Supp.2d at
504; Mecca v. Kemmerer Coal Co., 14 Black Lung Reporter 1-101, 1-104
(Benefits Review Board 1990); see also Lazarus v. Chevron USA, 958 F.2d
1297, 1299 (5th Cir. 1992) (LHWCA compensation is due and payable
when compensation order is filed in district director's office); Tidelands
Marine Service v. Patterson, 719 F.2d 126, 127 n. 1 (5th Cir.
1983) (same).
[14] The parties have not stipulated to the amount of benefits the Trust Fund paid the claimant pursuant to an effective award. They have stipulated only that the Trust Fund paid the claimant a total of $127,332.40.
[15] 20 C.F.R. §725.502(c)
provides that " . . . all past due benefits shall be paid during the month
in which the first benefit payment is made." The revised section 725.502(b)(2) changes the phrase "past
due benefits" to "the amount of benefits payable for periods prior to
the effective date of the order." 20 C.F.R. §725.502(b)(2) (2003). It also specifies that the district director
must calculate the amount of such benefits and notify the parties of the
amount. Such benefits must be paid
within thirty days of the district director's notice. Id.
[16] Mrs. Nowlin is correct that
an ALJ award obligates an operator to reimburse the Trust Fund for any benefits
it has paid. 20 C.F.R. §725.602(a)
provides that:
In any case in which the
fund has paid benefits . . . on behalf of an operator . . . which is determined
liable therefore . . . such operator . . . shall simultaneously with the first
payment of benefits made to the beneficiary, reimburse the fund (with interest)
for the full amount of all benefit payments made by the fund with respect to
the claim.
[17] Nor does the fact that section 725.607(b) entitles a claimant to twenty-percent additional compensation on "all amounts paid by the fund on behalf of such operator . . . " support Mrs. Nowlin's position. This language must be read in light of subsection (b)'s introductory language. A claimant is entitled to twenty-percent additional compensation only if the Trust Fund has made payments on account of an operator's failure to timely comply with an effective award. 20 C.F.R. §725.607(b) ("[i]f, on account of an operator's . . . failure to pay benefits as provided in paragraph (a) of this section, . . . . ") (emphasis added). Thus, Mrs. Nowlin is not entitled to twenty-percent additional compensation on those benefits the Trust Fund paid when no effective award was in place. See also argument ii, infra.
[18] EACC incorrectly assumes that 20 C.F.R. §725.502 (2003) applies to this case. See footnote 1, supra. Even if the regulation did apply, however, it would not support EACC's argument. The regulation, titled "When benefit payments are due," states that benefits are due after issuance of an effective order requiring the payment of benefits by an ALJ, notwithstanding an appeal to the Board, and that an ALJ's award becomes effective when filed in the district director's office. 20 C.F.R. §725.502(a)(1), (a)(2) (2003). Accordingly, this regulation would also impose on EACC the obligation to pay Mrs. Nowlin's benefits after the issuance and filing of each ALJ award.
[19] EACC advances another argument based on the revised section 725.502. It argues that it cannot be held liable for twenty-percent additional compensation because it timely reimbursed the Trust Fund for the benefits the Fund paid Mrs. Nowlin. EACC's Brief at 8-11. Like Mrs. Nowlin, EACC relies on section 725.502(b)(2), arguing that the obligation to pay past due benefits refers to the operator's obligation to reimburse the Trust Fund. EACC argues that it met this obligation. This argument fails for the same reasons that Mrs. Nowlin's argument based on the revised section 725.502(b)(2) failed. There were no past due benefits in this case, and the regulation does not address an operator's obligation to reimburse the Trust Fund. See discussion at 13-15, supra.
[20] EACC incorrectly assumes that the revised section 725.522 applies to this case. See footnote 1, supra; 20 C.F.R. §725.522 (2003). Revised section 725.522, however, does not differ from the earlier version of section 725.522 in any way material to this case.
[21] DOL made only technical revisions to section 725.607 in 2000. See 65 Fed. Reg. 79925 (Dec. 20, 2000) (list of regulations which underwent technical revisions). Nevertheless, the preamble discussed section 725.607's role in the regulatory scheme in the context of the substantive revisions to section 725.502.
[22] An overpayment occurs when more than the correct amount is paid to a claimant. 42 U.S.C. §404 (incorporated by 30 U.S.C. §§923(b), 940); 20 C.F.R. §725.540.
[23] If an award is reversed,
the amount the Trust Fund paid the claimant becomes an overpayment that the
Department may seek to recover. 42
U.S.C. §404 (incorporated by 30 U.S.C. §§923, 940); 20 C.F.R. §725.522(c). A claimant is entitled to waiver of recovery
of an overpayment, however, if recovery will either defeat the purposes of the
BLBA (i.e., deprive the claimant of income or assets needed to meet
ordinary and necessary living expenses) or be against equity and good
conscience. 20 C.F.R. §§725.542,
725.543.
[24] The preamble explained that
the only concern Congress expressed with regard to the application of section
14(f) in black lung cases was that an operator be afforded the right to contest
the claim before application of the provision.
65 Fed. Reg. at 80011 (quoting 127 Cong. Rec. 19,645 (1981)). EACC has not claimed that it was subjected
to section 14(f) liability without a hearing, although that would be the effect
of accepting Mrs. Nowlin's argument that EACC is liable for additional
compensation on benefits paid pursuant to the district director's May 4, 1981
award.
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